Division 296 Super Tax
Calculator AU 2026-27

No — and this is the single biggest misconception about the tax. The original 2023 'Better Targeted Superannuation Concessions' proposal calculated earnings as the movement in your Total Super Balance, which would have taxed paper gains on assets you never sold (farms, business premises, private company shares).

That design was abandoned. The final legislated version — Royal Assent 13 March 2026 — taxes realised earnings only: dividends, interest, rent and net realised capital gains as reported by your super fund and attributed to you as a member.

If your SMSF holds a property that rises $500,000 in value but is not sold, that $500,000 is not Division 296 earnings; the rent it produces is. A transitional rule even lets small funds make an irrevocable election to reset CGT cost bases to market value at 30 June 2026, so pre-existing unrealised gains are not swept in when assets are eventually sold.

Individuals — not funds — whose Total Super Balance exceeds $3 million at the end of the financial year, with 30 June 2027 the first test date. The tax is assessed to you personally by the ATO (like Division 293) and you can pay it from your own money or have it released from super.

Treasury estimated roughly 0.5% of super members (around 80,000 people) are affected initially — a widely reported estimate, not an ATO-published count. Members of APRA funds have earnings attributed by the fund; SMSF members have earnings attributed via an actuary's determination, similar to the unsegmented ECPI method.

Defined benefit interests are not exempt but are handled differently: the liability accrues to a 'Division 296 debt account' payable when the benefit is eventually paid out. Excluded interests include foreign superannuation funds, certain judicial pension schemes and some constitutionally protected funds.

Division 296 is law now. Both bills passed Parliament on 10 March 2026 and received Royal Assent on 13 March 2026.

The tax applies from 1 July 2026, making FY 2026-27 the first affected financial year. Nothing is payable during the year itself: your fund first reports FY 2026-27 realised earnings and your Total Super Balance is tested at 30 June 2027, after which the ATO calculates the tax and issues assessments — which the ATO says will begin issuing in the later half of the 2027-28 income year, i.e. from early 2028.

The tax is generally due 84 days after the notice, and you can elect within 60 days to have it released from your super instead of paying personally — similar mechanics to Division 293. The delay between the start date and the first bill is a planning window: FY 2026-27 is the first year in which realised gains, asset sales and withdrawals affect your liability.

Yes. Both thresholds — the $3 million 'large balance' threshold and the $10 million 'very large balance' threshold — are indexed to CPI under the final legislation, the $3 million threshold in $150,000 increments and the $10 million threshold in $500,000 increments (ATO).

This is a significant improvement over the original 2023 proposal, which had a frozen $3 million threshold, and a pointed contrast with Division 293, whose $250,000 income threshold has not moved since 1 July 2017. Indexation matters most for younger savers: a 40-year-old projected to cross $3 million in 15 years will actually face a materially higher nominal threshold by then (at 2.5% CPI, roughly $4.3 million), so the real crossing year is later than a fixed-threshold projection suggests.

Because indexation moves in whole steps, the threshold only changes in a year when cumulative CPI growth is enough to reach the next $150,000 increment.

They target different things and can both apply to the same person. Division 293 (since 2012) is a contributions tax trigger: if your Division 293 income exceeds $250,000, an extra 15% applies to your concessional super contributions — at most about $4,875 a year at the FY 2026-27 $32,500 cap.

Its threshold is not indexed. Division 296 (from 1 July 2026) is a balance tax trigger: if your Total Super Balance exceeds an indexed $3 million, an extra 15% applies to the proportion of your realised earnings attributable to the balance between $3 million and $10 million (25% above $10 million) — potentially tens of thousands of dollars a year on a large balance, with no cap.

A high-earning surgeon with $3.5 million in super could pay both: Division 293 on this year's contributions and Division 296 on this year's attributed earnings. Different triggers, different bases, same collection mechanics (personal assessment, payable personally or released from super).

You can manage it; you generally cannot dodge it by switching funds, since the ATO aggregates your Total Super Balance across all funds. Levers people consider with their adviser: (1) Withdrawals — if you have met a condition of release, drawing your balance below the indexed $3 million threshold before 30 June removes or shrinks the taxed proportion. (2) Spouse equalisation — contribution splitting and recontribution strategies move balance to a lower-balance spouse, giving the household two $3 million thresholds. (3) Timing realised gains — because only realised earnings are taxed, deferring an asset sale to a year when your balance (and therefore the taxed proportion) is lower changes the bill. (4) The irrevocable CGT cost-base reset election at 30 June 2026 for small funds. (5) Simply wearing it — even at a combined ~30%, super can remain competitive with the 47% top marginal rate outside.

All of these have second-order consequences; this is general information, not advice.

It depends on how far above $3 million you are, because the rate applies only to the proportion of earnings attributable to the excess. The attributable proportion is (TSB − $3,000,000) ÷ TSB using your 30 June balance.

At a $3.5 million TSB the proportion is 14.3%, so $100,000 of realised earnings attracts about $2,143 of Division 296 tax (15% × 14.3% × $100,000). At $4 million: 25% proportion, about $3,750.

At $6 million: 50% proportion, $7,500. At $10 million: 70% proportion, $10,500.

Above $10 million the marginal slice steps up to 25%: at a $12 million TSB, roughly 58.3% of earnings sit in the $3M-$10M band (taxed 15%) and 16.7% above $10M (taxed 25%), so $100,000 of earnings attracts about $12,917. The effective extra rate therefore glides from 0% at exactly $3 million towards 15% (and ultimately towards 25%) as balances grow — there is no cliff at the threshold.